Homework Answers
| Annual cashflows | 7300 | |||
| Multiply: Annuity PVF at 14% for 6 yrs | 3.88867 | |||
| Present value of cashflows | 28387.29 | |||
| Aftr tax salvage value (5400*0.455587) | 2460.17 | |||
| Release of WC (1000*0.455587) | 455.587 | |||
| Less: Investment | -28900 | |||
| less: Investmnt in WC in Year-0 | -500 | |||
| Less: PV f investment in WC in Yr-3 | -337.486 | |||
| (500*0.674972) | ||||
| Net present value | 1565.56 | |||
| Answer is A. $ 1565.54 | ||||
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